Unilever’s double-digit price increases see FTSE 100 Dove and Domestos maker revenues beat expectations at £13.1bn
- Unilever revealed that underlying sales were up 10.5% in the first three months
- Trading benefited from solid performance in all five of the company’s divisions
- The company has raised prices in response to the war in Ukraine and supply chain issues
Unilever beat sales growth forecasts in the first quarter as price increases offset additional inflationary pressures.
The owner of ice cream brands Ben & Jerry’s and Magnum revealed that underlying sales rose 10.5 percent in the first three months of the year, compared to analyst expectations of 7.2 percent.
Disappointing volumes were offset by price increases of 10.7 percent that the company made in the course of the past year.
Performance: The owner of ice cream brands Ben & Jerry’s and Magnum revealed underlying sales were up 10.5 percent in the first three months of the year
Despite the cost-of-living crisis hitting many of its key markets, Unilever told investors that trading benefited from solid performance across all five major divisions.
Sales grew the most in the beauty and wellness business after a spike in trade in Europe and the Americas, with higher demand for hair care products, petroleum jelly and Pond’s skin care brands.
Trade was further boosted by sales of the FTSE 100 company’s ‘billion dollar brands’, notably Hellman’s, Lux soap and Rexona deodorant.
Mark Crouch, an analyst at eToro, said: ‘Unilever is one of those companies that isn’t going to set the world on fire with high-speed technology, but it does have very reliable basic household brands.
“When inflation comes to light, as it did last year, consumers tend to stick with products they know, even as the company raises prices to maintain its margins.”
Total sales rose a more modest 7 percent to €14.8 billion (£13.1 billion), which the company said reflected adverse currency movements and the sale of tea company Ekaterra to CVC Capital Partners.
But Unilever now expects underlying sales gains for 2023 to be near the high end of the current forecast of 3 to 5 percent, supported by price increases, improved volumes and moderate cost inflation in the second half of the year.
Chief executive Alan Jope said: “We remain focused on navigating ongoing macroeconomic uncertainty and are confident in our ability to deliver another year of strong growth, which remains our number one priority.”
The Scottish-born boss, 60, is set to leave at the end of this year following fierce criticism from investors over his lackluster sales performance compared to peers and Unilever’s failed £50bn bid for GSK’s consumer healthcare division.
He will be replaced by Hein Schumacher, head of dairy and food products supplier Royal FrieslandCampina, who started his career as a financial manager at Unilever.
Since Jope took over in 2019, Unilever Shares treading water after more than doubling under his predecessor Paul Polman. They were up 1.45 percent on Thursday morning to £44.35.